Just a few habits and you are a millionaire
One of the most common categories of financial advice on TikTok is investment rules to help you make your first million. Such advice is usually shared by entrepreneurs who have achieved financial freedom within several years. For example, US businessman Robert Croak’s video “Do you want to become the first millionaire in your family?” received almost 4 million views. positive reactions.
He revealed a few simple rules: start investing early and as often as possible, setting aside 50-100 dollars a week, change your thinking – after receiving money, think not about how to spend it, but where to invest it. Also, give up three useless activities, and use your free time to improve two new skills, which after 3-6 months. could bring an additional source of income. Rūta Ežerskienė, board member of Citadele bank, responsible for retail banking in the Baltic countries, agrees that it is not necessary to have tens of thousands of euros to start investing. However, not everyone can put aside 50-100 euros every week, so you should invest according to your capabilities.
“Content creators often hook users with intriguing promises. It is important to manage your expectations – regular investing can help you accumulate a significant amount of money, but becoming a millionaire may not be possible for everyone. In order to increase income, you can really use your free time to learn new skills. However, it is important to listen to your needs – after rest, we can be more motivated and work more efficiently”, comments the expert.
Monthly savings challenges
A challenge that will allow you to save up to 200 euros per month is becoming popular on the TikTok network. Users are encouraged to draw a monthly calendar on their notes and mark in different colors 4 days on which they will not allow themselves to have any expenses and 8 days on which they will not buy, for example, coffee or lunch in town.
According to the representative of “Citadele” bank, this is an interesting experiment, but in reality it can be difficult to apply effectively.
“Perhaps on the day you planned not to spend anything at the beginning of the month, something important will happen and unexpected expenses will be needed, and on the day you planned to spend money, you will not actually need to buy anything?” Being on a strict regimen can make you want to reward yourself later, and you can end up spending even more of your savings than you saved. The golden tip is to immediately set aside part of the money for necessary expenses and part for savings after receiving a salary. By seeing the remaining amount for daily expenses and leisure time, you will be able to manage your expenses more easily,” says R. Ežerskienė.
The piggy bank is replaced by binders
Another savings method that has gained interest among consumers is to buy or make binders with envelopes numbered from 1 to 100 and regularly put the amount of money in each envelope according to the number indicated on it. In the end, this challenge can save you 5050 euros.
According to the expert, the challenge is attractive in that it is not necessary to deposit money every day, so everyone can try it according to their capabilities. Also, the playful process of putting the cash in a beautiful binder makes it more engaging and motivating.
“It is always recommended to put money into savings when you make money or get unexpected extra income. We basically see this principle being applied here as well. However, we don’t always have cash, but this method can be used by setting aside savings in a bank account and noting it in notes, or by using savings apps that also have game functionality,” says the interviewer.
Detailed cost budgeting
Soc. In addition to following their financial advice, the network’s content creators encourage you to purchase their digital tools, such as spending planners. Telling them how they track their budget in detail every month and how it helps them manage their expenses more effectively gets users interested in not only listening to their advice, but also buying their planning templates.
“By planning the budget in this way, we can clearly track income and expenses, determine what part of the income goes to necessary, variable expenses, and what part goes to savings. As inflation rose, many felt that while they were not allowing more money for leisure, there was less money to put aside for savings. This way we can see the reasons. It is not necessary to buy exactly the advertised mobile app, you can find similar free versions, or you can easily create such a budget planning table yourself on a computer, – comments the representative of the bank. – It is recommended to enter the amounts, even if it is unpleasant to do so. When we see that we’ve gone way over budget on non-essential items, we realize it wasn’t the best decision and we’ll likely be more responsible next time.”
50/30/20 and 70/20/10 rules
Two more rules are popular – 50/30/20, indicating that 50% of the budget should be income should be allocated to necessary expenses, 30 percent. – for variables and 20 percent. for savings. The 70/20/10 rule refers to the same ingredients, just in different proportions. Different content creators actively suggest users to use one of the rules, but do not provide reasons.
According to R. Ežerskienė, the choice of the rule should depend on the size and purpose of the income, how much and in what time you want to save. “Breaking down the budget into proportions helps you review your expenses, assess which ones are a necessity and which can be abandoned. After assessing your income and needs, you can set a specific part for yourself, which you will definitely set aside for savings and investment every month. This will help you develop the habit of saving and keep track of your budget. And with more money to spend, you’ll be able to put away more. On the other hand, as people’s life expectancy is getting longer, it is still recommended to aim for the portion allocated to savings and investment to be greater than 10%, so the 50/30/20 rule would more reflect the need to accumulate more in the future”, says the interviewer.
